Unemployment extensions could be back

Thousands of San Diegans cut off from their unemployment insurance extensions at the beginning of the year could be in for some new money.

The Senate on Thursday announced an agreement to reinstate the benefits for the long-term unemployed, which expired after five years and numerous extensions on Dec. 28, 2013. The weekly payments were for those on unemployment beyond the state standard 26 weeks, with the payments ranging from $40 to $450 per week. The benefit would be retroactive to the 1.6 million Americans who lost the benefit, including 18,720 San Diegans.

“There are a lot of good people looking for work and I am pleased we’re finally able to reach a strong, bipartisan consensus to get them some help,” Rhode Island Democrat Jack Reed said in a statement.

While the overall national job market has improved from a peak of 10 percent unemployment, long-term unemployment has remained stubbornly high. Those out of work 27 weeks or longer made up 37 percent of the jobless in February, when the unemployment rate was 6.7 percent. Last month, there were 3.85 million Americans without work for 27 weeks or longer, down from 4.7 million a year earlier, the Bureau of Labor Statistics reports.

The extensions began in 2008 in response to the Great Recession, and through a series of tiers at one point added to 99 weeks of unemployment. At last count, an unemployed person could get up to 73 weeks of the jobless benefit. In California, the long-term unemployed received $44.85 million in extensions, according to the state Employment Development Department.

A report by the Congressional Budget Office says restoring up to 47 weeks of the benefit would cost $19 billion.

Alan Gin, economist at the University of San Diego, said reinstating the benefit would help the long-term unemployed, who face a bias in the job market. It would also add buying power to the economy.

"It’s been so long that it might be very difficult for them to get jobs and so as a result of that the extension will at least get them through a little bit longer," Gin said. "The job market is solid, but we were in such a hole that it’s going to take a while to drive that unemployment rate down."

But Kelly Cunningham, economist at the National University System Institute for Policy Research, said money used for unemployment extension benefits could be better spent.

"I think we’d be all much better off if people had jobs, if there were economic opportunities to find employment," he said. "I have been one to say that this big transfer payment of taking money from producers and giving it to non producers is kind of an anchor on productivity."

At the San Diego Workforce Partnership, which funds career centers throughout the county, CEO Peter Callstrom said he didn't see a huge uptick in services when the benefits expired.

"I think it added probably more stress to everybody who is getting close to the end of their benefits," he said, noting that the career centers serve 15,000 people per year regardless. "A number of them are able to get positions fairly quickly but a lot of them need to retool and reskill. It’s an extremely competitive market so it just increased the urgency."

In San Diego County, the unemployment rate was 7 percent in January and there were 111,000 unemployed people, down from 8.5 percent unemployment and 136,700 unemployed a year earlier.